He said Australia had in recent years “emerged as a country where people and companies and even governments in many other countries were comfortable storing their data”, which had benefited the domestic tech sector and economy.

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“But when I travel to other countries, I hear companies and governments say we are no longer comfortable putting our data in Australia and so they are asking us to build our data centres in other countries and we will have to sort through those issues,” Mr Smith told the audience.

“The big concern you hear most often is that it would create a backdoor to undermine technology in a fundamentally important way.”

While the act protects companies from introducing a “systemic weakness” into their platforms to comply with an order from the government, Mr Smith said the phrase needed to be better defined. He urged the government “put the minds of other like-minded governments at ease”.

The legislation, passed with Labor’s support, allows Australia’s intelligence and law enforcement agencies to compel companies to enable access to the encrypted communications of criminal suspects. It was introduced in response to agencies’ growing concerns about suspects’ activities “going dark” and beyond the reach of investigators.

Critics have warned the bill could undermine national security, harm Australian companies and weaken the online security of innocent Australians.

Australia’s tech community renewed their criticism of the legislation at an event in Sydney on Wednesday, with Atlassian co-founder Scott Farquhar saying it was “dangerous” and poorly drafted.

Labor remains concerned about the legislation and has promised to enact changes.

The opposition digital economy spokesman Ed Husic promised Labor would amend the “terrible laws” so they don’t “wreck the tech”.

He said Labor would introduce judicial oversight for the powers and would clearly prohibit technical changes resulting in a systemic weakness.

The intelligence and security’s committee referral of the legislation for independent review is in response to ongoing concerns about the bill and its potential for unintended consequences.

Due to report back to the committee by March 2020, the review will examine whether the bill contains adequate safeguards for the rights of individuals, is proportionate to the national security threat and whether it remains necessary.

“The Assistance and Access Act seeks to respond to highly technical challenges encountered by Australian intelligence and law enforcement agencies, and the act has attracted significant domestic and international attention,” Liberal committee chair Andrew Hastie and Labor deputy chair Anthony Byrne said in a joint statement.

The pair said the review would provide a “valuable, independent perspective on the balance between necessary security measures and the protection of civil liberties”.

Fergus Hunter is an education and communications reporter for The Sydney Morning Herald and The Age.

Emma is the small business reporter for The Age and Sydney Morning Herald based in Melbourne.